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Act Ends Controversial Personnel System

WASHINGTON, Oct. 28, 2009  With President Barack Obama’s signature today on the 2010 National Defense Authorization Act, a controversial pay-for-performance personnel system is abolished.

About 220,000 Defense Department employees who had come under the National Security Personnel System will transition back to the long-standing General Schedule system, but that will take time, a senior official said.

Tim Curry, acting program executive officer for NSPS, said the department could start transitioning employees in six months. The department has begun a comprehensive planning process, he explained, with the goal of ensuring a smooth and orderly transition of employees and organizations out of NSPS.

"The department is going to proceed deliberately and cautiously without unnecessary delay," Curry said during an interview today. The transition will take place organization by organization, he said to minimize disruption. Meanwhile, employees under NSPS will remain in that system.

"It took three years to bring those 220,000 employees into the system," Curry said. "Congress recognized that it was going to take time … to do it right."

The new law gives Defense Department officials six months to develop and submit a plan to Congress detailing the transition. The whole transition must be finished by Jan. 1, 2012.

"We will work under NSPS for the time being, while we are working on the transition plan," Curry said. "When we're at the point where employees come out of the system, … the law ensures that no employee's pay will be reduced when converting out of NSPS."

Employees outside of NSPS are not affected by the change.

Curry's office is also studying the new law's other civilian personnel ramifications. He said these include requirements for performance management, hiring flexibilities, training requirements and the department’s ability to go back to Congress for added personnel flexibilities.

"We're looking at what that means and how to proceed,"

Curry said. "We're just assessing the impact and how to move forward."

The major complaint about NSPS was that it was overly complicated and that no employee understood the pay pool process, Curry said, pledging that department officials will take the lessons from the NSPS experience as it moves ahead.

"We'll be particularly mindful of issues surrounding complexity and transparency," he said. "Those are certainly important considerations to ensure employees understand and accept and buy into any rules that will be put in place."

Civilian employees under NSPS finished a rating cycle at the end of September. These workers will receive performance ratings and payouts effective in January under NSPS, Curry said. A provision of the act requires that employees with Level 2 ratings or higher are guaranteed a pay increase in January that’s at least equivalent to the pay increase that applies to General Schedule employees.